Re: Oil to Plunge Below $25 Next Year, Merrill Lynch Says

mg wrote:
On Dec 8, 9:33 am, Alan Lichtenstein <a...@xxxxxxxxx> wrote:

mg wrote:

On Dec 8, 4:28 am, Alan Lichtenstein <a...@xxxxxxxxx> wrote:

. . .

I agree, but those shortages, if not artificially contrived, are
determined by supply and demand. I can live with prices that are the
results of real supply and demand. IMHO, I think government
intervention is warranted only if the public needs a commodity, and the
prices established by normal supply and demand of the marketplace would
price the majority of the public out of acquisition of that commodity.
Hence, rationing, so that the entire public can get their fair share,
and not have to alter their lifestyles so the rich can benefit. We're
not there yet, and if we establish the alternative energy, particularly
for personal transportation vehicles, we hopefully, never will be. That
is the difference between what the Left wants and the Right wants. The
Left wants an energy supply so that the majority won't have to alter
their lifestyles, and the right wants an energy supply that only the
wealthy can afford.

. . .

We have a philosophical disagreement on how markets should work that
probably can't be resolved. You favor eliminating the judgment of the
futures market participants and instead you would control prices based
on supply and demand only. Presumably, this would be done based on
some sort of government formula or bureaucratic decision. If there
were a war, for example, you would oppose price increases purely on
the possibility of a supply disruption and wouldn't allow a price
increase unless and until a disruption actually occurred. Actually, it
appears that you would do away with the futures market altogether and
impose prices based on current conditions only. In addition, someone
like me, for instance, would not be allowed to buy commodities, except
perhaps for something I could take possession of, like gold for
instance, assuming the government didn't pass a law against that also.

You misunderstood what I said. I favor supply and demand with respect to the commodity markets, with the proviso that the participants in those markets are true commodity purchasers and NOT simply speculators looking to hedge their bets from other markets. Furthermore, I recognized that simply supply and demand cannot necessarily be the lone determinator when a particular commodity is diminished in total supply and the majority of the population requires that commodity or would have to alter their lifestyles, as with the case with oil.

I wouldn't do away with the futures market because to do so would eliminate supply and demand and remove capitalism from the equation, which I do not favor. With respect to war, i recognized WHY price increases occur during a war, and it is because of either supply routes being interdicted as a consequence of said war, or because a particular commodity is diverted to military use. With regard to the war you proposed, it is evident that supply routes would not be interdicted, as one of the potential adversaries lacks sufficient naval assets to achieve that, and the depth and breadth of the war would not require large portions of the commodity to be diverted to military use. subject to that, if you could afford to purchase the contract, and would take delivery of the commodity, nothing would prohibit you from participating in the market.

I, on the other hand, believe the futures market performs a legitimate
function and the government shouldn't interfere with it in a major
way.

I agree, and it is evident you severely misinterpreted what I wrote. We part company because I recognize the futures market provides a legitimate function in that it uses the marketplace and supply and demand to establish market prices for commodities, but you, OTHO, would also permit the futures market to be a haven for speculators hedging their bets as refugees from other markets.

.

Relevant Pages

  • Re: Oil to Plunge Below $25 Next Year, Merrill Lynch Says
    ... results of real supply and demand. ... prices established by normal supply and demand of the marketplace would ... price the majority of the public out of acquisition of that commodity. ... futures market participants and instead you would control prices based ...
    (soc.retirement)
  • Re: Say It With Me: Supply and Demand
    ... By Charles Krauthammer ... Not even really supply and demand.. ... A condition in which distant delivery prices for futures exceed spot ... and paying for storage and selling it on the futures market. ...
    (alt.politics.bush)
  • Re: Say It With Me: Supply and Demand
    ... Not even really supply and demand.. ... A condition in which distant delivery prices for futures exceed spot ... People can make more money by taking delivery of oil at todays prices ... and paying for storage and selling it on the futures market. ...
    (alt.politics.bush)
  • Re: Say It With Me: Supply and Demand
    ... Not even really supply and demand.. ... A condition in which distant delivery prices for futures exceed spot ... People can make more money by taking delivery of oil at todays prices ... and paying for storage and selling it on the futures market. ...
    (alt.politics.bush)
  • Re: Prius - eco-friendly, my ass
    ... In a true Supply and Demand market place, the suppliers would make more under these conditions. ... There is no evidence that Supply & Demand is at work here because all consumers could refuse to visit the local gas pump tomorrow and the next day, but gas prices would remain stable on the third day. ...
    (alt.autos.toyota)
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